Retailers forecast strong holiday, show hiring restraint

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According to a survey released Tuesday by global management consultancy Hay Group, 68% of retailers expect holiday sales to increase this year. However, hiring plans remain conservative, with 67% of retailers hiring at the same level as last year and 25% hiring fewer seasonal workers.

“Retailers have a tempered optimism about the holidays this year. Cost inflation has made profitability more elusive, and retailers are trimming the fat with staffing and store hours,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice.

The double-digit growth in e-commerce sales this year is also influencing hiring levels. Nineteen percent of retailers said they will hire fewer seasonal staffers in stores this year due to the increase in their online sales. This decline may be offset by the 19% that said they will hire more seasonal workers in distribution centers to support the uptick in online orders.

Hay Group’s survey, in its fifth year, analyzed responses from 21 major U.S. retailers.

Other report highlights included an uptick in permanent workers, as 19% said they are hiring fewer seasonal and more permanent workers this season. Pay rates for seasonal workers are largely even with 2010, but 19% plan a modest uptick of 5 cents to 30 cents. Still, 48% note that they pay seasonal workers less than permanent workers in the same position, compared with 25% last year.

Discounting may not be as rampant in holiday 2011. An overwhelming majority said they are not planning to offer deeper discounts on Black Friday (89%) or Cyber Monday (94%) this year. The timing for discounting also continues to be spread throughout the season. While 78% said the timing for holiday promotions will remain consistent with 2010, 22% said they will begin earlier this year. A majority (63%) plan to start promotions in November, but some early birds plan to begin in October (13%), September (6%) and even August (6%).